Dropbox loses after actual property brokers misplaced $ 400 million to distant working

Dropbox Co-Founder and CEO Drew Houston to speak at CNBC’s @Work conference in San Francisco on November 4, 2019.

Arun Nevader | CNBC

Dropbox on Thursday reported a one-time charge of $ 398.2 million in the fourth quarter to reflect the company’s move to remote work.

When the coronavirus hit the U.S. last year, companies closed offices and urged their employees to work from home. Some companies found that remote working didn’t hurt – and in some cases helped – productivity and employee satisfaction and tried to make them more permanent. This can be costly for companies with significant real estate footprints.

Dropbox, which makes cloud-based storage and productivity software and is known for its spacious office space in the South of Market neighborhood of San Francisco, announced its “virtual first” remote work schedule in October.

“Working remotely (outside of the office) is the most important experience for any employee and the daily default for individual work,” Dropbox said in a blog post. Some office space will remain for collaboration, and Dropbox will sublet some of the space.

In the first, second and third quarters of 2020, Dropbox reported a net profit after years of losing money. The “rights of use and other lease-related assets” impairment charge reported by Dropbox in its income statement for the fourth quarter reverses this phase and results in a loss of nearly $ 346 million for the company compared to earnings of $ 33 million for the third quarter.

The charge was excluded from non-GAAP results, which reflected earnings per share of 28 cents from 16 cents in the prior-year quarter and exceeded the consensus of analysts surveyed by Refinitiv of 24 cents per share. Dropbox shares fell 1% in expanded trading.

Before Dropbox committed to making its employees work remotely, tech companies like Atlassian, Twitter and Zillow had announced that they would allow employees to continue working from home even after the pandemic ended. Earlier this month, Salesforce, the largest employer in San Francisco, announced that most of its employees will be in offices one to three days a week once it is safe to return.

After thousands of its employees got used to work without being next to their co-workers, Pinterest announced in October that it had agreed to pay $ 89.5 million to sign a lease for 490,000 square feet of office space near the San Francisco headquarters. That way, it wouldn’t have to pay at least $ 440 million in rent.

SEE: Dropbox CEO on “Virtual First” initiative for employees to work from home

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